This subproject is one of many research subprojects utilizing the resources provided by a Center grant funded by NIH/NCRR. The subproject and investigator (PI) may have received primary funding from another NIH source, and thus could be represented in other CRISP entries. The institution listed is for the Center, which is not necessarily the institution for the investigator. Diabetic retinopathy (DR) is a leading cause of blindness in the US. The early pathologic hallmarks of DR nclude retinal vascular cellular dysfunction, blood-retinal barrier (BRB) breakdown, vascular leakage and neural degeneration. Although the mechanisms largely unknown, recent studies suggest that oxidative stress and inflammation plays a critical role in the pathogenesis of DR. Pigment epithelium-derived factor (PEDF) is an endogenous angiogenic inhibitor. Accumulating evidence suggests beneficial effects of PEDF in DR, i.e. nhibition of retinal neovascularization and reduction of vascular leakage;however, the mechanisms are not fully elucidated. Our recent novel studies demonstrated that PEDF is a potent anti-inflammatory factor and inhibits vascular leakage in DR. Moreover, PEDF reduces diabetes-induced superoxide (O2.-) and peroxynitrite (ONOO-) production in retinal pericytes and in diabetic retina. Based on these important findings, we hypothesize that PEDF ameliorates diabetic retinal complications by reducing oxidative stress and inflammation. In Aim 1, we will focus on establishing the activity of PEDF as an endogenous anti-oxidant factor by determining the effects of PEDF on O2.-/ONOO- generation, pro-inflammatory factor expression, endothelial tight junction and neuron degeneration in cultured retinal endothelial cells and retinal neurons. We will also determine if over-expressing or down-regulating PEDF in the retina will ameliorate or augment oxidative stress and inflammation in DR by comparing these parameters in diabetic and normal age-matched PEDF transgenic mice, PEDF deficient mice and wildtype mice. In Aim 2, we will explore the mechanisms by which PEDF inhibits O2.-/ONOO- formation. We hypothesize that PEDF suppresses diabetes-induced O2.- generation via up-regulation of anti-oxidant enzymes and / or protection of mitochondrial function. If our hypothesis is proved, we will pursue the signaling pathway to explore how PEDF regulates anti-oxidant enzymes and / or how PEDF protects mitochondrial function. If the results indicate that other mechanisms may also contribute to the PEDF effects on anti-oxidation, we will determine alternatively if and how PEDF reduces superoxide generation by inhibiting the major redox enzymes, i.e. NADPH oxidase, xanthine oxidase and eNOS. The success of this project will not only identify a novel pathogenic mechanism for DR, but also contribute to the development of new therapies using endogenous angiogenic inhibitors.